With digitisation becoming one of the major focus areas of this Government, the telecom industry is hoping that this year’s Budget will finally give communication infrastructure its due importance by identifying it as a strategic area.
Over the last few years, the Budget has not meant much for the telecom industry with the sector hardly finding any mention in the Finance Minister’s speeches. That’s because the Centre has looked at telecom only as the golden goose that brought revenues to the exchequer.
The industry is hoping that will change this year especially since Prime Minister Narendra Modi is keen to boost communication infrastructure given that it is critical for the development of the Digital India campaign.
“We are hoping that the Finance Ministry will provide essential infrastructure status to the industry. But because of our prior experience, by and large our wish-list this time is mainly on certain technical issues such as spectrum amortisation and some matters on charging and collection of service taxes,” said Rajan S Mathews, Director-General at Cellular Operators Association of India (COAI).
COAI, the apex industry association of mobile operators, is hoping that the Government will reduce the amortisation period on spectrum for tax purposes and offer tax holiday of 10 years on spectrum obtained by the new licencees.
Mobile handset makers are also expecting big push to the Make in India vision. Already about 40 brands have set up some form of handset manufacturing capabilities in the country.
“We expect zero duty to be withdrawn on five new products — mechanics, die-cut parts, USB connectors, keypads, mike and receivers — that are being brought under the phased manufacturing programme in the Budget, and differential duties being brought in. This will result in an increase in value addition,” Cellular Association National (ICA) President Pankaj Mohindroo said.
Component industryThe mobile phone component industry has also grown well with new plants being set up for chargers, batteries and headsets.
“We have proposed a direct income tax dispensation, where a preferential treatment linked to value addition should be given,” Mohindroo, who is also the chairman of the Government-backed Fast Track Task Force that promotes local manufacturing.
“The wish list of the industry includes some sops on deployment of fibre and re-look at regulatory policies not just on telecom but on the larger environment for digital economy. This includes e-commerce, banking and electronic payment modes among others,” Amresh Nandan, research director at Gartner, said.
The competitive environment in the country had resulted in operators rolling out 4G services, but the deployment of fibre, which is essential for digital economy, is yet to take off. Now, only 15 per cent of towers in India are connected through fibre, compared with 75 per cent across the world. The country mostly uses microwave technology to connect towers.